In June 2011, Google’s YouTube launched “Box Office”. The launch was a free service streaming online Bollywood blockbusters 24*7 by Google India. The service was free but the videos had ads packed around it. Google took time to showcase what it has in store and in the mean time, it has also made sure that it built a quality partner base. With the online video consumption gradually increasing day by day and YouTube being the favorite choice, this was a natural progression. It did the same in Australia, Korea, Japan, etc.

So the obvious question that comes to mind – Will this move hurt the local players in the market? There are some amazing startups that have sprouted in the Indian market such as BoxTV, iStream, etc.

I had a chance to interact with Pandurang Nayak, Business Head at BoxTV.com. BoxTV.com, A Times Internet Company is a premium video service that is not just focusing on Indian content (Bollywood and Regional) but is also offering a large section of Hollywood content.

Pandurang accepts the fact that YouTube is a dominant player in video worldwide but in BoxTV.com’s case Google has been a strong partner in premium video initiatives like it has been during the IPL over the past couple of years. He further added that,

“Google also has the core focus on advertising and creating platforms for user-generated content, which is not something we’re focused on. So in our view, Google is more a partner that we can explore opportunities for leveraging each other’s strengths like we’ve done in the past.”

Google has joined hands to build a strong partner network. However, premium video content market is still nascent and one of the reasons being the common sentiment that anything on the Internet is for free.

“We recognize India is a price-sensitive market and paid content is a new concept that will take time to be accepted widely” adds Pandurang. He further adds that, “Users need to recognize that better quality content, earlier access to content, great viewing experiences, and all the good things with well-made content come with a price, since there are significant investments in creating and distributing that content. We think that if we strike the right balance between the user experience and the content pricing, then users won’t mind paying – just like they don’t mind paying for a DTH or cable service, or much higher for a theatrical experience. It’ll take time, and the users will have to be shown the value by marrying great user experience with the right pricing. ”

This would only stand true if online video content producers start producing original video content for online consumption.

Recently, we saw this holding true while we did a study to find out how the Indian TV is doing on YouTube. Channels like Zee were having low viewership even though they were uploading more content than Sony Music, which was had been growing the fastest in the report. One of the reasons we found out was that Sony Music was sharing exclusive content in the form of interviews, curated music lists for fans apart from the regular content.

But isn’t infrastructure the bottleneck in the growth of video consumption in India and indirectly affecting the premium content?

“India has low broadband penetration compared to many countries around the world and especially low given we have a vast population. It is one of the rare markets where numbers-wise, mobile Internet penetration is much higher than PC Internet penetration – however speeds are low and actual high speeds (greater of 1Mbps) are still a small single-digit fraction of the overall Internet users”accepts Pandurang.

But then he also added that he would have really wished there was overall better infrastructure and hopefully with time 3G/4G services will change it over time. “There still exists a market, albeit smaller than other countries, that wishes to consume online services. Most early-to-the-game services have to start with a low target market and bet over growing substantially over time.”

There is a market for both freemium and premium but content is always treated in a way it is served. So free video packed with ads will have it’s own market and there would be people who would be ready to pay for online content since they want to see exclusive, quality ones and from any where, any device. The market is still maturing. Giants like Google jumping into the market will be a threat to an extent but when bigger players jump in too, it also helps to build up the market eventually helping the eco-system.

For me whoever gives me exclusive and rich content, I am sold to them. Since I don’t watch the TV anymore as I prefer to watch video content that interests me and at a time that is convenient to me. What about you?